More than 2.5 million out of work as unemployment soars to 17-year high

Wednesday 16 March 2011 09:42 BST

Out of work: Youth unemployment is at a record high

The jobless total has jumped to its highest level for 17 years.

Unemployment surged 27,000 over the winter to reach 2.53 million or 8 per cent of the workforce. It was last at that level at the end of the last recession in 1994.

The figures, which cover November to January, were described as "shocking" by union leaders and the Government admitted that rise was "bad news." The higher unemployment tally is largely down to public sector job cuts.

In London the number of people without work rose 16,000 to 392,000 or 9.4 per cent, the worst since 1997.

However, there were some more hopeful indicators in today's official figures. The number of people signing on for Jobseeker's Allowance unexpectedly fell 10,200 last month to 1.45 million.

But youth unemployment increased by 30,000 to 974,000, the highest since records began in 1992 and looks certain to break the 1 million barrier in the coming month.

The unemployment rate for young people rose by 0.8 per cent to 20.6 per cent, also a record high.

TUC General Secretary Brendan Barber said: "Today's figures are shocking. Over a year after the recession technically ended unemployment is now at its highest level since the mid-1990s, with 2.53 million people out of work.

"The increase in the unemployment rate for young people is of real concern. Youth unemployment is at a record high, with more than a fifth of young people unable to find jobs, the risks for the future are very real."

Employment Minister Chris Grayling said: "There is good news and bad news in these figures.

"There's been a welcome drop in the number of people on benefits, and the increase in full-time private sector jobs is a step in the right direction.

"But the rise in overall unemployment is a real concern and underlines the need to press ahead with policies which will further stimulate growth in the private sector."

But there were few signs of a feared spike in pay rises, which would increase the risk of an imminent interest rate hike.

Average earnings increased by 2.3 per cent in the year to January, well below the 4 per cent rate of inflation and continuing the squeeze on living standards. The figure was up 0.5 up on the previous month but this was mainly because of City bonuses.

In London the worst unemployment blackspots are Newham and Tower Hamlets where the jobless rates are 12.4 per cent.